Today the Chancellor George Osborne unveiled his Spending Review.
Here’s a list of key points from the Spending Review that could have an impact on your finances:
- New social housing tenants will be offered discounted rents at 80% or so of the typical market rent. This will not apply to existing social housing tenants. The chancellor has predicted that this will enable the provision of up to 150,000 new affordable homes.
- Mr Osborne says he understands the public’s anger at banks which and says they have been “poorly regulated”. He added that new legislation which will introduce a tax levy for banks will be published on Thursday. He also said that while the government does not want to “let banks off”, it must also avoid driving them overseas, because of the number of jobs they provide.
- The state pension age will increase from 65 to 66 by 2020, which is four years earlier than had been planned. This will eventually save over £5 billion a year
- A ‘Green Investment Bank’ will be set up with £1 billion of funding.
- Funding for the Department for Energy and Climate Change (DECC) will fall by an average of 5% a year.
- The Renewable Heat Incentive will go ahead, with £860 million funding and the aim of driving a huge increase in renewable heat over the coming decade.
- DECC will fund a smaller, more targeted Warm Front programme for the next two years with a budget of £110 million in 11/12 and £100 million in 12/13.
- From 2013, support for heating and insulation for the most vulnerable will be delivered through the Green Deal.
- From April 2011, energy suppliers will provide greater help with the cost of energy bills for vulnerable fuel poor households, through Social Price Support – with total support of £250 million in 11/12 rising to £310 million in 14/15.
- Feed-in tariffs will continue at their present level until 2013, but will be ‘refocused’ on the most cost-effective technologies after that.
- The TV license fee will be frozen at its current price of £145.50 for six years
- The temporary increase in the Cold Weather Payment will be made permanent.
- Child Tax Credit will increase by £30 in 2011/12 and £50 in 2012/13.
- Sure Start services will be protected in cash terms and disadvantaged two-year-olds will get 15 free hours of early education and care.
- Higher-rate tax payers will no longer recieve Child Benefits, saving £2.5 billion a year.
- Benefits for people of working age and tax credits are to be replaced by a new single ‘Universal Credit’.
- The new cap for increases in rail fares will be 3% above inflation from 2012 onwards, meaning prices will rise.
What do you think of the cuts? Are you planning a Spending Review of your own, and if so, which areas will you be cutting back on? We’d love to hear your thoughts.